California Governor, Legislature Announce Agreement on PAGA Reform

California Gov. Gavin Newsom, legislative leaders, and business and labor groups announced this week that they reached an agreement on needed reforms to the Private Attorneys General Act (PAGA). Legislation reflecting this agreement is set to be introduced next week and enactment sought by next Thursday, June 27. Once the legislation is passed and signed into law by the Governor, proponents of the PAGA ballot initiative eligible for the November ballot have agreed to withdraw their measure.

​A coalition of business groups, including HCAOA, the U.S. Chamber of Commerce, the California Association for Health Services at Home, the California Chamber of Commerce, and the California Retailers Association, filed a lawsuit in 2021 to block AB 51, which would allow individuals to sue a former employer as an agent of the state under PAGA. The lawsuit argued that AB 51 was contrary to a history of Supreme Court decisions declaring that states may not interfere with the arbitration process.

This PAGA reform proposal would reform penalty structure, reduce and streamline litigation, and improve measures for injunctive relief and standing. The HCAOA California Chapter supports this agreement and will share additional details as they are available.